topic Re: Auto Loan- DTI in Auto Loans

Auto Loan- DTI

jbee — Sat, 15 Feb 2014 12:23:21 GMT

I may be purchasing a new car this year. My goal is to get CS over 720. My two problems are: my husband CS is a lot lower, and the mortgage is only in my name so it takes my DTI up a lot. Do you think I should have husband to apply and consign with him or would they take our word that he pays our mortgage? What is the going DTI for an auto loan? I bought a house 3 years ago and now it feel like the house buying process all over again.

Thanks for your help..

Re: Auto Loan- DTI

SamsungHDTV — Sat, 15 Feb 2014 15:06:10 GMT

I think lenders will calculate a combined DTI if it is a joint application. So they will consider that his income is being used to help pay the mortgage. I think that as long as one of you has a strong credit score, you should be getting 2-3% if not better. The max DTI is going to be 36-45% depending on your lender you go with.

Bottom line, if you have a good credit score dont worry so much. You will be fine.

Re: Auto Loan- DTI

Remember0 — Sat, 15 Feb 2014 15:59:14 GMT

@SamsungHDTV wrote:
I think lenders will calculate a combined DTI if it is a joint application. So they will consider that his income is being used to help pay the mortgage. I think that as long as one of you has a strong credit score, you should be getting 2-3% if not better. The max DTI is going to be 36-45% depending on your lender you go with.

Bottom line, if you have a good credit score dont worry so much. You will be fine.

+1. 36-45% sounds about right depending on the lender. And yeah, good credit score is the most important thing with cars. I think you'll be fine...qualifying for an auto loan is MUCH easier than a mortgage in today's world. In many ways, auto loans are like the mortgages of pre-2008.

Re: Auto Loan- DTI

jbee — Sat, 15 Feb 2014 18:06:05 GMT

Thanks. My CS is around 670 right now because of high CC balances, but I will have them paid down before I apply. Hopefully, I can get to 720-730.

Re: Auto Loan- DTI

andersk08 — Mon, 17 Feb 2014 02:31:05 GMT

Im kinda sorts in the same boat, but not really. I have a low Fico...548... but make 70k a year, the significant other has a 766 fico with a much lower annual salary and a mortgage payment to boot. I was unable to obtain an auto loan on my credit alone so she cosigned. Actually she applied as the primary and me as the secondary. Crossing fingers. Should hear something tomorrow.

Re: Auto Loan- DTI

Remember0 — Mon, 17 Feb 2014 03:55:53 GMT

@andersk08 wrote:
Im kinda sorts in the same boat, but not really. I have a low Fico...548... but make 70k a year, the significant other has a 766 fico with a much lower annual salary and a mortgage payment to boot. I was unable to obtain an auto loan on my credit alone so she cosigned. Actually she applied as the primary and me as the secondary. Crossing fingers. Should hear something tomorrow.

@I think you guys will be fine. Hypothetically what would your SO's DTI be if she took on the car loan? AKA her (Monthly car loan est. payment @ 2% + Mortgage + Minimum monthly payments of CCs even if you pay them off monthly) / (Provable Gross Income)

Re: Auto Loan- DTI

andersk08 — Mon, 17 Feb 2014 04:24:54 GMT

Im not possitive. Id have to ask her when she woke up lol. She also receives 900 a month in child support which she didnt include on the application. If denied I assume we could always resubmit with the additional income. I was always told though that with a 766 Fico score they would pretty much loan you whatever you wanted.

Re: Auto Loan- DTI

Remember0 — Mon, 17 Feb 2014 04:37:50 GMT

Oh okay, yeah you can definitely resubmit with that as long as you can prove that you guys actually RECEIVE that payment (can't just be a court order, but the othey guy isn't paying).

I was only asking because sometimes it's cheaper (in terms of APR) to only have her on the loan. Essentially a co-signer with a low FICO might raise rates vs. no cosigner. And you're right, with a 766 and nothing baddies, as long as it's not a thin file, most lenders won't even verify anything and hand out top tier APR. Also they might overlook things like a slightly higher DTI.

Let us know what happens in the coming days. I don't think you have anything to worry about. Just be cautious if your APR is too high (I'll say >5% for a new car). As long as the income isn't really low (which it can't be if a mortgage was closed post-2010), you guys should be getting top tier rates as she should qualify standalone.

Re: Auto Loan- DTI

andersk08 — Mon, 17 Feb 2014 04:41:44 GMT

I will definitely keep you posted. I've received 2 alerts this far from gmac and Santander in regards to them pulling my credit. We applied via dealership late Saturday afternoon so not many banks were open. Hopefully a solid answer tomorrow.